2025 ATO Warning: Tax Claims You Can and Can’t Make This Year
Claiming deductions can reduce your tax bill and give your return a strong finish. But when personal spending is disguised as work-related, the ATO takes notice. As the 2025 tax season approaches, it’s time to sharpen your understanding of what qualifies — and what doesn’t.
Let’s break down the key areas the ATO is focusing on this year, so you can lodge with confidence.
What the ATO Has Flagged This Year
Some deduction claims have caught the ATO’s attention for all the wrong reasons:
- A mechanic tried to deduct an air fryer, microwave, vacuum cleaners, a TV, and a gaming console
- A truck driver attempted to claim swimwear bought during a hot delivery route
- A fashion executive submitted over $10,000 in designer clothing and accessories
- A mechanic tried to deduct an air fryer, microwave, vacuum cleaners, a TV, and a gaming console
These claims failed because they lacked a direct connection to earning income. The ATO considered them personal in nature.
To ensure your deductions are valid, each one must meet these criteria:
- You spent the money yourself
- The expense directly relates to earning your income
- You have evidence, like receipts or invoices
- You spent the money yourself
If a claim doesn’t clearly tick all three boxes, it’s best to leave it out — or check in with a professional.
Key Focus Areas for 2025
The ATO is paying close attention to the following areas:
Work-Related Expenses
Claims must be clearly linked to your income. Vague or personal purchases won’t pass ATO scrutiny, even if you use them while working. Keep detailed records and only include expenses that are strictly work-related.
Working from Home Deductions
There are two methods you can use when claiming:
- Fixed rate method
Claim 70 cents per hour for extra costs like electricity, internet, and phone usage. You don’t need a dedicated home office, but you must keep a detailed record of your actual hours worked from home throughout the year. - Actual cost method
Claim specific expenses that relate to working from home. This could include depreciation of home office equipment or utility usage. This method usually allows for larger deductions but requires more record keeping.
- Fixed rate method
Double claims are not allowed. For example, if you claim using the fixed rate method, you cannot also claim separate deductions for mobile phone or internet usage.
Multiple Income Streams
All income must be reported, including gig economy jobs and side businesses. Each income source might offer different deductible opportunities, but they all need to follow ATO guidelines and be supported with proper documentation.
Stay Compliant. Stay Informed. Let Aero Help You Lodge With Confidence.
Navigating deductions can feel complex, especially with changing rules and closer ATO scrutiny. With the right guidance, you can identify what to claim, avoid unnecessary risk, and lodge a return that stands up to review.
Aero Accounting Group is here to support you at every step. Our team helps business owners make smart tax decisions, stay compliant, and get the most from every return — without crossing the line.
Ready to get your tax right this year? Contact Aero Accounting Group today to book your consultation. Let’s make this your most confident return yet.
Aero Accounting Group. Straightforward advice. Trusted expertise. Here to help business owners move forward.
Need help?
Not sure if your current accountant is a good long-term fit? Contact us at Aero Accounting Group today and we’ll help you minimise your taxes and maximise your profits
